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Kicking the Tires

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Kickstarter is to me, perhaps, the most fascinating industry force of the past few years. While, I remain unconvinced that it has the likelihood or even potential to change the face of gaming or of funding for development of games — claims which I’ve occasionally heard whispered — there’s no doubt that it is also tapping into a deep well of interest from an aging internet generation with an increasingly disposable income to give at least some corner of the industry back to the people. Kickstarter may not have companies like Activision quaking in their boots, but there’s no question that it’s becoming a player in the game.

I have to remind myself that Kickstarter is a larger enterprise, where video game funding is only a part of the whole. It is somehow intellectually rewarding to log into the home page and see artistic endeavors of all kinds getting attention and patronage, and to know that because of Kickstarter, there will be more books, more art and more music in the world. And, more importantly, that those artistic endeavors have been facilitated through a more intimate medium, where the relationship between creator and receiver is direct.

But Kickstarter is also facilitating significant sums of cash. Add up the combined total of the top 3 funded projects for each major section of Kickstarter, and you get a number that is in the $20,000,000 range. Granted, the total sum of funding to all projects for Kickstarter since 2009 probably would be barely enough to back your average studio romantic comedy — the vast majority of those dollars come from within the past year, or even 6 months. Kickstarter is obviously on a roll, which to my mind leads to an important question about the long term feasibility of this system.

What happens when some of the high profile projects inevitably fail?

Like anyone else, I love seeing the underdog win. Watching Double Fine collect more than 3 million dollars from people passionate for games like Day of the Tentacle, Full Throttle and Grim Fandango actually gave me a somewhat surprising pleasure. Particularly once I’d helped fund the game, I allowed myself to become beguiled by the alluring illusion of having a personal stake in the success story of the project. After all, that’s the magic of Kickstarter.

But in the cold, stark reality of day, I find a cynical corner of my brain asking, “Isn’t there a reason why some of these projects, perhaps many of these projects, couldn’t get funded in a more traditional manner?” Aren’t there at least some of these projects or project creators that were turned away because their vision had some fundamental flaw — or worse, because they themselves were not in position to deliver?

I don’t really doubt that a well established and experienced company like Double Fine is in position to deliver, but for some of these other projects I’m not so sure. After all, even in the best of conditions, how often do veteran game makers blow through their budgets and have to come back later and ask for more from their publishers? It’s certainly not unprecedented. So how would this scenario go down in Kickstarter land? What happens when Small Game Maker X underestimates the massive sometimes-hidden costs in creating, refining, producing and distributing their game?

The reality is that, while Kickstarter certainly frowns on the idea of not delivering, they do also wash their hands of being responsible for project creators following through. In their FAQ, they clearly indicate that project creators are solely responsible for delivering on promises. They also make it clear that they do no investigation to verify that a project creator is in position to deliver. So what does Kickstarter identify as the big accountability driver in this process? “Powerful social forces.” Also, potential litigation.

The message in summary is that the responsibility for verifying that a project is legitimate and achievable, for kicking the tires as it were, falls entirely on the backer. It is truly caveat emptor.

Don’t misunderstand me. This isn’t a criticism or indictment of Kickstarter, because it’s exactly what I’d do if I were in their position. First of all, I’m not sure these guys expected to be almost routinely funneling around millions of dollars for relatively major endeavors. More importantly, taking responsibility for making sure people actually deliver would be tantamount to putting a noose around the company’s neck while doing a tapdance on a roof ledge. They’d be stupid to take on that responsibility.

And, after all, they are right. This is an age where powerful social forces do impact behavior, not just on the micro but the macro level as well. I’d argue that powerful social forces are exactly what has turned Kickstarter into something relevant. My concern is that those powerful social forces are catastrophically fickle, and I wonder what the real-world result of one or two failures might be. Certainly the project creators for a high-profile failure would be run out of town on a rail, but it’s hard to imagine that Kickstarter itself wouldn’t get rounded up by the mob in the process.

It doesn’t even have to be a failure from the perspective of a major project creator delivering nothing. Imagine for a moment if a game like Elemental had been funded in part or whole by Kickstarter. What happens when a project creator delivers technically on their promises, but not aesthetically? What if the new Wasteland game is released and it’s just kind of crappy?

I feel like there is a lot of pressure on these first rounds of high-profile Kickstarted games to actually do well in release and in the public eye. It’s great that there’s been so much enthusiasm for giving money directly to creators of content, but now the onus is on them to deliver on some of these very big promises they’ve made. To be honest, I think the future of Kickstarter itself actually lies with them.

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What if the new Wasteland game is released and it’s just kind of crappy?

Much wailing and gnashing of teeth! Hopefully it doesn't negatively affect KS, or people's perception of KS. It's best framed as a pre-order system, isn't it? But if you've framed yourself as a backer then maybe you feel like you're an investor—but you don't have any say after "Here's some money", and that would probably magnify disappointment beyond what a "backer" could reasonably claim.

Video games, with their budgets, is one thing though. What looks really exciting is KS' potential for board games, where I imagine much of the cost is in production, as a type of "fund a print run" dealie.

Gravey, I'm never sure, on a scale of 1-10, just how serious you are when you post. – Minarchist

In some cases, it really is nothing more than a pre-order engine, sometimes layered with perks for hitting financial milestones. Zombiecide & OGRE in the board game space are great examples.

In some cases, I want to see someone do something new, or different, or at least have the opportunity to try to do something that might not otherwise get funded. This is the "patron-lite" model. Wasteland is a great example of this.

In both cases, it behooves the kicker to decide 2 things:1. Which variant are they comfortable with: 1, or 2, or both?
2. Am I okay with losing my "investment" if nothing materializes?

The two big questions I have about the viability of Kickstarter are:A) As Elysium pointed out - what happens when people are uncomfortable with #2?B) What happens in the case of the patron model when customer perception and develop intention don't meet?

I strongly suspect both A & B lead to fewer people kickstarting projects, which leads to a higher burden of "proof" for the people & studios wanting to run a kickstarter for their project. Projects may trend more towards model A where most are "pre-order" type scenarios, but I doubt the patron-lite model will completely disappear as obviously people are hungry to support studios and people doing things differently.

I want to see someone do something new, or different, or at least have the opportunity to try to do something that might not otherwise get funded.

This is exactly why I've kicked in $10-$15 to several video game projects. I want to help facilitate the creation of the game, and I want to support this new type of funding for games.

Elysium wrote:

What happens when a project creator delivers technically on their promises, but not aesthetically? What if the new Wasteland game is released and it’s just kind of crappy?

I think it's safe to say that for most (if not all) of the video game projects, backers will be invited to the game's beta, for actual testing of technical aspects and aesthetics. At least that's what my common sense tells me.

Good article and this topic is something I've thought about lately due to a slight sting from the recent Orion boondoggle. Hey, does this rash look infected to anyone else?

The thing is, Kickstarter isn't really all that necessary for the process. It provides a nice clearing house for crowd-funding, but projects like Xenonauts and Zomboid have done fairly well using just a "donate" button on their website. Give them X dollars, get a copy of the game when it comes out. They were kickstarting before kickstarting became a thing. Those hipsters.

I have little worry that outfits like Double Fine are going to have a hard time producing a product. They have an established track record and a reputation to uphold (which I think means a lot in this industry). On the flip side, you have some really abysmal projects (as documented in the Interesting Kickstarter Catch-All) which are the obvious bottom feeders just trying to see if they can find gold in them thar hills.

So that's to be expected I guess (the iOS app store had/has the same problem).. You have your max/minimum, but what's problematic for me is how do you suss out the soggy middle? I chipped $10 to the Orion guys (so they could demo the game at GDC & PAX) since I thought it was a fun looking concept, but wasn't thinking much about whether or not they had the chops to pull off a real project. Flash forward 15 months and they squeeze out an interim "shut up or put up" project as a way to get more money into the studio, and let's be honest... It's not that good from all accounts including a fubar'd launch and 4 days of patching drama. Needless to say, at this point I don't have high hopes for the final product.

I don't feel too slighted by this ($10 isn't going to break my monthly budget): from what I can tell the KS money was used for GDC expenses, and I got a free game I wasn't expecting (even though it's not very good) since the KS backers were only promised the Prelude game, not Beatdown. Yet, I do feel a bit of backer's remorse since I should've done a bit more research before giving them money, with the end result being that I'm now a little wary of being burned on other small projects that I've backed. (Although, to date I've had 3 other projects return great results so I'm batting .750 which isn't bad.)

I still believe Kickstarter and crowd-sourcing is an amazing thing to see when it works, and I certainly take pleasure in knowing I've helped a bunch of projects get off the ground, but it's not something to go into with blinders on.

ClockworkHouse wrote:

It's just good to know that you're already thinking about your FFXV yaoi fanfic.

What I find interesting is that these issues are coming up now, but they would seem to me to be just the same issues and risks that funding publishers (or whoever funds a game) have had to deal with for years.

The funding or "green light" is based upon doing a good pitch to convince your funders, and after that there's the possibility that they could fail or produce crap, and I don't really see this eventuality changing because the money comes from a different source. Just as with a company pitching to a publisher, they've got to do due diligence that the project is plausible.

It doesn't seem like anything new to me, just that people are seeing it from a different angle. Whereas before it would be "So that's a crap game, guess I won't buy that then" when you get to see the finished product before buying and the "green light" decision was years ago behind closed doors, now it's open for all to see, and people are taking a risk.

What I find interesting is that these issues are coming up now, but they would seem to me to be just the same issues and risks that funding publishers (or whoever funds a game) have had to deal with for years.

+1 to this. It's very much seeing how the sausage gets made and no doubt publishers/investors see this sort of stuff on a daily basis.

The only downside, is that there's no real contractual agreement to really protect your investment if you see a back project about to derail :\

tajoman wrote:

(can't get links to work, sorry...)

Give it some time. New users can't make links until they're past Coffee Grinder status and/or some amount of real life time has passed. Also, welcome!

ClockworkHouse wrote:

It's just good to know that you're already thinking about your FFXV yaoi fanfic.

What I find interesting is that these issues are coming up now, but they would seem to me to be just the same issues and risks that funding publishers (or whoever funds a game) have had to deal with for years.

+1 to this. It's very much seeing how the sausage gets made and no doubt publishers/investors see this sort of stuff on a daily basis.

And that's where the growing pains are coming in. Kickstarter lets smaller projects pitch themselves to less "savvy" (perhaps less cynical, less profit-driven) investors, but that means both sides may not be as good at knowing their role.

Hypatian wrote:

Words... are a big deal.

Enix wrote:

The only way writers are going to get better is if they get some decent damned editing.

What I find interesting is that these issues are coming up now, but they would seem to me to be just the same issues and risks that funding publishers (or whoever funds a game) have had to deal with for years.

+1 to this. It's very much seeing how the sausage gets made and no doubt publishers/investors see this sort of stuff on a daily basis.

And that's where the growing pains are coming in. Kickstarter lets smaller projects pitch themselves to less "savvy" (perhaps less cynical, less profit-driven) investors, but that means both sides may not be as good at knowing their role.

What I find interesting is that these issues are coming up now, but they would seem to me to be just the same issues and risks that funding publishers (or whoever funds a game) have had to deal with for years.

+1 to this. It's very much seeing how the sausage gets made and no doubt publishers/investors see this sort of stuff on a daily basis.

And that's where the growing pains are coming in. Kickstarter lets smaller projects pitch themselves to less "savvy" (perhaps less cynical, less profit-driven) investors, but that means both sides may not be as good at knowing their role.

Exactly. Wordy has earned a beer from me at the next RabbitCon.

To quote Harry Potter: "Constant vigilance!"?

ClockworkHouse wrote:

It's just good to know that you're already thinking about your FFXV yaoi fanfic.

This article is exactly what I was thinking. Gamers are about the most entitled bunch of consumers you could find, so I can only imagine the blowback when some of these games aren't up to expectations. There will be forum posts full of foaming-at-the-mouth "investors" demanding patches or refunds. It will be a PR nightmare.

My own opinion is that this won't be a sustainable means of funding game development for this reason. Once everyone realizes they aren't getting exactly what they expected out of these projects, there will be coups, and the devs won't be bothered to deal with it after the first couple cycles of that.

Hey, those Renaissance patronage systems resulted in a huge blossoming of public art.

I had to double check just to make sure I was reading that right.

I'd say either reading is accurate.

Also, my feeling is that the blowback would probably happen for these projects regardless of whether they were Kickstarter driven. The only difference is that they might not exist at all without the Kickstarter funding. Looking at the recent anti-EA backlash, I think that level of rage is simmering under the surface, and will be triggered by any perceived betrayal. On the other hand, the developers will still have a product, and still be able to present it to the people who want it at the end of the day - it's the sort of thing that will probably have an effect on specific future projects down the line, but I don't think it'll crush the model as a whole.

Also, my feeling is that the blowback would probably happen for these projects regardless of whether they were Kickstarter driven. The only difference is that they might not exist at all without the Kickstarter funding. Looking at the recent anti-EA backlash, I think that level of rage is simmering under the surface, and will be triggered by any perceived betrayal. On the other hand, the developers will still have a product, and still be able to present it to the people who want it at the end of the day - it's the sort of thing that will probably have an effect on specific future projects down the line, but I don't think it'll crush the model as a whole.

Yes, but think about what happens to that simmering rage when it's fueled by a sense of ownership in a game. It's not going to be pretty and I doubt it will be worth it for smallish devs.

What I find interesting is that these issues are coming up now, but they would seem to me to be just the same issues and risks that funding publishers (or whoever funds a game) have had to deal with for years.

+1 to this. It's very much seeing how the sausage gets made and no doubt publishers/investors see this sort of stuff on a daily basis.

And that's where the growing pains are coming in. Kickstarter lets smaller projects pitch themselves to less "savvy" (perhaps less cynical, less profit-driven) investors, but that means both sides may not be as good at knowing their role.

No one spending money on kickstarter is an investor. You're essentially purchasing the "items" or pre-purchasing the items. It's revenue to the company that is trying to kickstart their product. Which is completely different from an investment. So many of these kickstarter games are giving the game away at say, $50, which means it's not an investment. It's a sale. Companies do not treat it as an investment and it's time the press stop reporting it as investing in ideas, you're buying something. It will be treated as sales revenue and the stuff given away will either be CGS or a promotional expense, (more likely, it will be treated as CGS).

I think if the people using kickstarter were being a bit smarter, they wouldn't be giving away the item being kickstartered to the people who give money. Make people double dip. I think for a game like the Double Fine Adventure, I think so much of the market for the game has already purchased it. Which means, how is the game going to actually create a sustainable business model? Are they going to come back for the sequel? If the game is good there will be people but how many people are going to be ready to belly up at the table again and give them money? I don't see the Kickstarter fad being sustainable in the long term, but I could be completely wrong on this point. I'm cynical when it comes to things like this. I think by the time we start seeing the first round of kickstarter games it will be much harder to kickstart new games.

Gamers are about the most entitled bunch of consumers you could find, so I can only imagine the blowback when some of these games aren't up to expectations. There will be forum posts full of foaming-at-the-mouth "investors" demanding patches or refunds. It will be a PR nightmare.

True, but it will probably be entitled-Internet fury - fierce, all-encompassing, and over in a day.

Ulairi wrote:

I think for a game like the Double Fine Adventure, I think so much of the market for the game has already purchased it. Which means, how is the game going to actually create a sustainable business model?

Why do they need another business model? The money they received is the same money they would have received for those sales, only they got it early (so they can, you know, eat while they code). They've already made a profit, assuming they've budgeted correctly.

The thing is, to a certain extent wouldn't that be justified entitlement? I know there's a difference between what kickstarter is and a contract signed in blood to make a game to specific specifications, but it does seem like if a delivered kickstarted game does vary from the pitch, that exactly the kind of thing people should be annoyed with.

As much as games generally are small fry at times, and some of the funding options are pretty small amounts of money, it's still the same principle on delivering what you said you were going to deliver. On the issue of keeping expectations correct between both parties, that's down to good communications and an honest pitch.

What I find interesting is that these issues are coming up now, but they would seem to me to be just the same issues and risks that funding publishers (or whoever funds a game) have had to deal with for years.

+1 to this. It's very much seeing how the sausage gets made and no doubt publishers/investors see this sort of stuff on a daily basis.

And that's where the growing pains are coming in. Kickstarter lets smaller projects pitch themselves to less "savvy" (perhaps less cynical, less profit-driven) investors, but that means both sides may not be as good at knowing their role.

No one spending money on kickstarter is an investor. You're essentially purchasing the "items" or pre-purchasing the items. It's revenue to the company that is trying to kickstart their product. Which is completely different from an investment. So many of these kickstarter games are giving the game away at say, $50, which means it's not an investment. It's a sale. Companies do not treat it as an investment and it's time the press stop reporting it as investing in ideas, you're buying something. It will be treated as sales revenue and the stuff given away will either be CGS or a promotional expense, (more likely, it will be treated as CGS).

I think the point of these discussions is that the Kickstarter model and income via Kickstarter don't fit easily into traditional understandings of investment, charity, or accounting. You say it isn't really an investment, and will probably be treated as sales. I could rebut that it's not truly a sale, either. It has similarities to some aspects of charitable giving, in that it resembles getting a free tote bag for your donation, but it's technically not that, either. And I think we can both agree that when it comes to accounting and investments, especially within the context of charity (boy, do I ever know this, thanks to Chicago Loot Drop), technicalities are seriously important.

Which, of course, means that once a big project fails, there will be litigation.

Hypatian wrote:

Words... are a big deal.

Enix wrote:

The only way writers are going to get better is if they get some decent damned editing.

I think it's really hard to buy the "it's a sale" angle, when 1) there is a non-zero chance not only that you will never get the product you bought, but that it will never be made and 2) as Ulairi rightly points out there is a model in which you can spend the money but your "reward" is not the actual product itself.

I agree it's not an investment -- which is why I didn't phrase it that way -- but credit to Justin McElroy who keyed me in to the patronage angle, which I immediately agreed with him on and still do.

The thing about smart people is they seem like crazy people to dumb people -- Thing I saw on the Internet

Gamers are about the most entitled bunch of consumers you could find, so I can only imagine the blowback when some of these games aren't up to expectations. There will be forum posts full of foaming-at-the-mouth "investors" demanding patches or refunds. It will be a PR nightmare.

True, but it will probably be entitled-Internet fury - fierce, all-encompassing, and over in a day.

I'm not so sure... you see what's happening with Mass Effect 3? There was a lawsuit filed over it and now there's a documentary chronicling the fan response. I can't even imagine what the reaction would have been if gamers would have been asked to pay for it up front.

wordsmythe wrote:

I think the point of these discussions is that the Kickstarter model and income via Kickstarter don't fit easily into traditional understandings of investment, charity, or accounting. You say it isn't really an investment, and will probably be treated as sales. I could rebut that it's not truly a sale, either. It has similarities to some aspects of charitable giving, in that it resembles getting a free tote bag for your donation, but it's technically not that, either. And I think we can both agree that when it comes to accounting and investments, especially within the context of charity (boy, do I ever know this, thanks to Chicago Loot Drop), technicalities are seriously important.

Which, of course, means that once a big project fails, there will be litigation.

Exactly, and it does loosely fit the definition of investment. Maybe not by traditional terms, but you are "investing" in the sense that you're providing the company with capital to make a product.

I think if the people using kickstarter were being a bit smarter, they wouldn't be giving away the item being kickstartered to the people who give money. Make people double dip. I think for a game like the Double Fine Adventure, I think so much of the market for the game has already purchased it. Which means, how is the game going to actually create a sustainable business model? Are they going to come back for the sequel? If the game is good there will be people but how many people are going to be ready to belly up at the table again and give them money? I don't see the Kickstarter fad being sustainable in the long term, but I could be completely wrong on this point. I'm cynical when it comes to things like this. I think by the time we start seeing the first round of kickstarter games it will be much harder to kickstart new games.

The way I see it, traditional development is deficeit spending. You're accumulating a lot of expenses/debt with the expectation that you'll be able to pay them off once the sales roll in. With the crowd-source model you're able to pay off some of the expenses as you go, and you also get the benefit of knowing how big your audience is. Which, in theory, means you can scale your project up and down as necessary, and it gives you a concrete budget constraint to work in.

As for Double Fine sales... I'm not sure DF tapped all their possible audience for cash. You're talking ~87,000 people pre-ordering the game. I find it hard to believe that's their entire market. There's also a strong likelihood that a number of people wanted to see how the game turns out before they give DF some money. Once a project is fully backed, there's little incentive to go ahead and back it if you're on the fence about the desirability of the final product (which is probably why "stretch goals" are now a thing).

Elysium wrote:

I think it's really hard to buy the "it's a sale" angle, when 1) there is a non-zero chance not only that you will never get the product you bought, but that it will never be made and 2) as Ulairi rightly points out there is a model in which you can spend the money but your "reward" is not the actual product itself.

I think it depends on the project. Battle Chess is currently up for a Kickstart and they're looking for money to add online multiplayer to the game. The solo exerience (vs. AI) is done, and in fact you can find traces of the game in Steam already without much digging. Backing them is closer to a "sale" than say the Double Fine "we're going to make a game, but we don't have an idea yet" pitch. Other examples include OGRE, Zombicide, Cthulhu Saves the World, the Order of the Stick book reprint, etc.

I agree it's not an investment -- which is why I didn't phrase it that way -- but credit to Justin McElroy who keyed me in to the patronage angle, which I immediately agreed with him on and still do.

I wholeheartedly agree this is the right attitude to have in regards to crowd-sourcing.

The founders & operators of Kickstarter themselves promote the pre-order + patronage visions, and wording to this effect is included in their site materials.

In recent interviews, they see a continued growth for projects that speak to both of these, but they want to ensure that those kickstarter efforts have concrete project deliverables and aren't just speculative/R&D projects.

But it's absolutely correct that some of the projects are much more on the patronage line: developer has an idea and wants to pursue it, and I want to enable them to realize their vision (even it departs from what *I* think it should be). And I'm okay with that... I doubt others will if the promises aren't met or there's misalignment in understanding the vision between dev and kickstart backer.

I suspect a fair number of these bigger projects are going to take the money they make from KS and go to a non-traditional publisher or funding arm and say: Look. Here is a market for this thing we're making. Kickstarter got us 1/3 - 2/3 of the way - please help us get further. I think that's a pretty compelling argument right there alone, and might not carry the same baggage as traditional developer-publisher agreements.